Basel IV: The Challenges

Abstract

The Basel IV accords that were introduced in late December 2017 was the first set of Basel accords that was not introduced against the backdrop of a global financial crisis. While Basel IV addresses most of the shortfalls of Basel III, it has failed to address the issue of risk-weights that are attached to sovereign debt, which is a significant shortcoming under the Basel Accords. This paper analyses the Basel accords, particularly in light of the economic impact of the novel coronavirus (“COVID-19”) pandemic, which has proven to be surprise test on the resilience of the revamped Basel Accords.

Keywords: Basel IV, COVID-19, Sovereign Risk Weights